The three metrics you need to use when tracking your online sales
How do you measure the success or failure of your online sales? Here are the three metrics you need to use when tracking them.
As a small business, it is easy to believe that tracking online sales is just about worrying what is in your inventory and checking in on your profits.
But, while these details will certainly help you make practical, high-level decisions about your store and your income, they might not help you to grow your business.
To grow your sales, you first need to understand what success looks like, how to measure it and then consider what to do if you aren’t hitting your vision for the best business possible.
A four-step strategy to rack your online sales
The best strategy for tracking your online sales has four steps. These include:
- Setting measurable goals, known as key performance indicators. These KPIs help you to define what success will look like for you.
- Defining the metrics, you are going to use to tell you if you have reached this level of success.
- Choosing your tool for monitoring these metrics. Most eCommerce sites provide analytics, and you can use Google Analytics too.
- Assessing the adjustments that you need to make that will help you to reach the outcomes you have set for yourself.
Choosing when to review and when to take action is part science and part art. Most successful businesses make small adaptations on a daily basis but will leave significant pivots to a quarterly or bi-annual review.
How to choose the right metrics when tracking online sales
One of the most important parts of this process is sorting the best metrics to track. It is easy to get overwhelmed by data and not know how to use it.
Data is only as useful as the onward actions you take. That’s why you need to be selective about those numbers that will reveal your key performance. Here are three metrics you can use.
1) Conversion rate
Conversion rate is an obvious area to track, as it tells you how successful your site is in delivering you sales. There are different ways to track conversion. First, you can look at your segmented conversion rate. This percentage tells you how many people visited your site and went on to make a sale.
So, if 14 customers bought something from you out of 150 people who visited, you would have a segmented conversion rate of 9.3%. Getting almost 10% of all visitors to buy something is a decent metric and one that could measure success.
You could also look to find out the conversion by traffic source. In other words, where do the people who end up buying come from? It might be that most of your sales come from a Google search, in which case investing in GoogleAds and SEO could be a great investment. It might also be that your social media is your most profitable source of custom. Therefore, you would pour some time, attention, and money into your Facebook or Instagram.
Finally, you should look at the conversion by device type. It is likely that the majority of your custom comes via a mobile device. Knowing this number will allow you to design the post in an optimal way for a phone or tablet screen. For instance, you wouldn’t want too much text before the buy button, to avoid endless scrolling.
When and where your customers leave your online store without making a purchase is valuable data. It will help you discern where the blocks are to convert that customer. The cart abandonment metric is one such metric and if this is high you can use the automated follow up email option that is available on most eCommerce sites.
It is also possible to use Pixels to employ retargeting ads for those who have abandoned products in the cart. They will then be reminded of the choice they have made in onward internet experiences.
It is also possible to track funnel abandonment with Google Analytics. This data will tell you where in the whole sales funnel you are seeing most drop off. It is then possible to make edits to your site to overcome these obstacles in the user experience.
The one metric you are used to tracking is your sales data. How many have you sold? How much profit has this made you? It is all good fodder for knowing your success story but with limited value in knowing how to act next.
However, knowing your sales to new customers over existing customers and the lifetime value of existing customers can help discern if you are inspiring loyalty or not.
Your average order value is also a means of increasing your revenue. You can use this to see if you should implement strategies such as upselling, cross-selling, discount for volume, free shipping or a coupon for an order of a specific size.
How do you track your online sales?
What is clear from all this tracking is that data is no use without action. The metrics to track are those that provide information that will shape your day-to-day strategy and your future plans. Therefore, be selective but be alert to what the selected metrics are telling you – and you will find greater success.
Laura McLoughlin is a Digital PR based in Armagh, Northern Ireland. She has previous experience as a website editor and journalist, and currently works with Chorus Commerce.
Photo by Austin Distel